Several manufacturers make substantial investments to compete in sports contests, using the gear they develop and market. However, no systematic analysis of the breeding (i.e., innovation) and branding (i.e., marketing) returns from such investments exists. In this study, the authors conceptualize and empirically estimate the breeding and branding returns that such manufacturers obtain. The authors gather data for 30 car brands of 16 manufacturers over the period 2000–2015 regarding their participation, spending, and performance in Formula One championships, annual patent citations, and research-and-development (R&D) budgets as well as monthly vehicle registrations, advertising expenditures, and Formula One TV viewership. The authors find that only gear manufacturers with relatively high levels of R&D spending obtain a positive and significant breeding return from competing in sports contests. While most brands obtain positive branding returns, the lower the level of advertising spending for the brand, the greater the branding returns they obtain from competing in these contests. Thus, research-intense (compared with advertising-intense) gear manufacturers have more to gain from competing in sports contests.

1. From:From:
Companies often use their products to
compete in sports contests
Van Everdingen, Hariharan & Stremersch (2019)
Trek spends €14 million/year &
employs 40 staff members on the
UCI World Tour
Daimler spends €200 million/year &
employs 700 staff to compete in
Formula One
Amer Sports spends €9 million/year
to compete in the FIS Alpine Skiing
World Cup
What are the benefits of this strategy?
• Links the firm brand name more strongly to the sport and increases
positive perceptions
• Introduces and demonstrates newest firm innovations

2. From:From:
 Study of 30 car brands (from 16 firms)—10 car brands (from 9 firms)
competing in Formula 1 between 2000-2015
 Results:
 Competing in F1 improves new car sales.
 Competing in F1 and advertising produces a weaker effect on new car sales than
competing in F1 or advertising alone. Companies should use one strategy or
another to maximize new car sales.
Key findings from
Van Everdingen, Hariharan & Stremersch (2019)